Ralph Hume Garry (A Firm) v Gwillim
| Jurisdiction | England & Wales |
| Judge | Lord Justice Ward,Lord Justice Mance,Sir Martin Nourse |
| Judgment Date | 22 October 2002 |
| Neutral Citation | [2002] EWCA Civ 1500 |
| Docket Number | Case No: A2/2001/2198 QBENI |
| Court | Court of Appeal (Civil Division) |
| Date | 22 October 2002 |
[2002] EWCA Civ 1500
Lord Justice Ward
Lord Justice Mance and
Sir Martin Nourse
Case No: A2/2001/2198 QBENI
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
Mr Justice Tomlinson
Philip Newman appeared pro bono for the Appellant in Person
Paul Girolami Q.C. (instructed by Barlow Lyde & Gilbert) for the Respondent
Introduction.
The appellant, Mr David Gwillim, is an experienced solicitor specialising in construction disputes. He became embroiled in a dispute with his partners in the firm Winward Fearon and instructed the respondents, Ralph Hume Garry, to act on his behalf to extricate him from that partnership and to recover the sums due to him on the taking of the necessary accounts. Mr Stephen Ralph, also a very experienced litigator, supervised his junior partner Mr Simon Blandy in this task. On 25 th April 1998 Mr Gwillim signed the firm's standard terms of business which provided that fees were to be calculated on the basis of hourly rates for the time spent and the standard hourly rates were agreed. Bills were to be submitted on a monthly basis and would "take the form of a final account for all work done during the relevant period". If a fee note was not paid when due, the firm reserved the right to charge interest on the balance outstanding at "the official judgment rate" from when the bill was due until payment in full was made. This appeal concerns the propriety of the bills submitted and gives rise to a point of principle of some importance to solicitors. The facts which underlie the dispute may not make the finest advertisement for the profession and perhaps the least said about the merits, or what could be seen as the common lack of them, the better.
In short, the material facts are that between 30 th April 1998 and 22 nd June 2000 Ralph Hume Garry rendered 23 bills for their fees and disbursements in the total amount of £215,819.09 of which only £87,883.39 was paid leaving a balance outstanding of £127,935.70. In July 2000 the firm issued a claim for that amount with interest thereon to that date of £7,502.31 and for further interest thereafter. Those fees were incurred partly in proceedings commenced in the High Court by Mr Gwillim against Winward Fearon for the dissolution of the partnership. These proceedings were stayed when the defendants resorted to the arbitration clause in the partnership deed. Mr Gwillim had to pay the defendants their costs of about £8000. He then took the dispute to arbitration. He succeeded in a preliminary issue and was awarded costs. The main arbitration apparently lasted 7 days and the arbitrator found that in fact the firm had already been dissolved. There was a further hearing to deal with costs which resulted in the arbitrator ordering Mr Gwillim to pay the costs of the arbitration in the sum of £200,000 or thereabouts. The taking of an account was allowed (though not without difficulty) and eventually (and after Ralph Hume Garry had terminated their retainer because their fees remained unpaid), the arbitrator found that Mr Gwillim was entitled to £84,000. I do not know how long that hearing lasted or who was liable for the costs. On any account Mr Gwillim is very considerably out of pocket having regard to his liability for the very substantial costs he has been ordered to pay and for his own costs whatever they may prove to be.
Mr Gwillim originally sought to defend the claim not on a basis that his solicitors were not entitled to their fees as billed but only on the basis that his liability was extinguished or was to be reduced by setting off his counterclaim for damages for the negligent conduct of the proceedings on his behalf. He requested the court to assess the proper quantum of costs. In summary his allegations of professional negligence, which are extensive, cover these principal grounds. First he complained that the firm lulled him into the litigation and then the arbitration after giving him hugely over-optimistic advice as to his prospects of success. Secondly, the firm failed to have regard to the fact that he had a limited "fighting fund" of only £30,000 and could not afford and did not wish to risk the enormous liability for costs which he has now incurred. Thirdly, he alleged that the firm should never have advised him to commence proceedings in the High Court given the arbitration clause. Fourthly, he complained of the manner in which the arbitration was conducted and particularly of the decision to allow the arbitration to proceed by way of a split trial of liability and quantum which had the result that although he "won", he lost the main battle for costs. Finally, his solicitors failed to help him with regard to costs insurance.
These issues were fixed for trial for five days between 15 th and 25 th October 2001 when, without any warning, Mr Gwillim applied on 7 th September to strike out the claim for disclosing no reasonable grounds for bringing it. He contended that Ralph Hume Garry were not entitled to sue on the fee notes rendered because they failed to comply with the strict requirements of the Solicitors Act 1974. On 27 th September 2001 Tomlinson J. dismissed that application but Mr Gwillim appeals with permission of Rix L.J.
The Bills.
Each of the bills stated the period to which the work related and identified the matter as one "Re: Your dispute with David Cornes and others re: Winward Fearon". The first bill described the work in these terms:—
"To the provision of legal services to date, involving taking instructions, consideration of your bundle of documents, advising you thereon, drafting memoranda and correspondence on your behalf. The whole involving meetings with you and discussions over the telephone and with David Cornes to date.
Disbursements …"
The second bill gave a similar description. The validity of these two bills is not challenged before us.
The third to sixth bills describe the work done in these terms:—
"To continue to act on your behalf in relation to the above matter.
Disbursements …"
There was a slight change in the "mantra", as it has been called, for the next batch of bills where the phrase "To our professional charges" was added to precede the description "to continuing to act on your behalf in relation to the above matter".
The last two bills were for "disbursements only" being a further amount of unpaid counsel's fees of £46,770.87 and the cost draftsman's unpaid fee of £740.25.
The first eleven bills delivered between April 1998 and January 1999 were paid in full – though usually by instalments – and £10,781.13 was paid on account of the twelfth bill rendered in February 1999 for a total amount of £14,770.23. By then Mr Gwillim had paid about £83,000. He paid a further £4,883.39 to settle the July and August bills, but he paid no more.
Mr Gwillim's Case.
Mr Gwillim contends that these bills are defective because they fail to give an adequate description of the work done to justify the fees charged. Tomlinson J. observed:—
"It is perhaps surprising, as I have already indicated, that the defendant did not at an earlier stage make an application of this sort if the point was thought to be well founded. However Mr Newman for his part whilst accepting that it would have been preferable if this point had been thought of at an earlier stage, nonetheless submits that if it is a good point it is a point that goes to the jurisdiction of the court and therefore it is one which the court should and must entertain, even at this late stage before the due date of the trial."
I agree with all those comments.
In a sentence, Mr Gwillim's case is that these bills are defective because they do not contain sufficient to tell the client what it is for which he is asked to pay. I note in parenthesis that the argument was addressed to us on the basis that all bar the first two bills (which were hardly informative) were thus infected even though it may be said that the last two bills, being for disbursements only, fall into a different category. We have not had to investigate whether proper requests were made for detailed bills, nor whether the bills which were paid in full are to be treated as settled and thus no longer open to challenge.
The current Statutory Scheme.
The case hangs upon the meaning and effect to be given to section 69 of the Solicitors Act 1974 ("the 1974 Act"). This reads as follows:—
"Action to recover solicitor's costs.
(1) Subject to the provisions of this Act, no action shall be brought to recover any costs due to a solicitor before the expiration of one month from the date on which a bill of those costs is delivered in accordance with the requirements mentioned in subsection (2); …
(2) The requirements referred to in subsection (1) are that the bill –
(a) must be signed by the solicitor, or if the costs are due to a firm, by one of the partners of that firm, either in his own name or in the name of the firm, or be enclosed in, or accompanied by, a letter which is so signed and refers to the bill; and
(b) must be delivered to the party to be charged with the bill, either personally or by being sent to him by post to, or left for him at, his place of business, dwelling house, or last known place of abode;
and, where a bill is proved to have been delivered in compliance with those requirements, it shall not be necessary in the first instance for the solicitor to prove the contents of the bill and it shall be presumed, until the contrary is shown, to be a bill bona fide complying with this Act.
(3) …"
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